PRODUCTS

What is a product? A product is the object of a transaction!

What is a product? It can be a: 1.Good

What is a product? It can be a: 1.Good 2.Service

What is a product? It can be a: 1.Good 2.Service 3.Idea

What is a product? There are, by definition… CONSUMER PRODUCTS: 1.Convenience minimal effort… little decision making

What is a product? There are, by definition… CONSUMER PRODUCTS: 1.Convenience minimal effort… little decision making 2.Shopping more involvement

What is a product? There are, by definition… CONSUMER PRODUCTS: 3. Specialty high involvement, unique, hobbies

What is a product? There are, by definition… CONSUMER PRODUCTS: 3. Specialty high involvement, unique, hobbies 4. Unsought emergencies supplies, etc.

What is a product? And BUSINESS PRODUCTS: 1.Installations nonportable, facilities and equipment 2.Accessory equipment used for production 3.Raw materials 4.Component parts finished parts to build something else 5.Process materials used to make other thing, but disappears or is used up.. Coal 6.MRO supplies Maintenance, repair & operating 7.Business services

What customers think they are buying

What customers is actually buying

Life Cycle between Countries

The steps in product development:

Services

Most business in the United States is services:

Services Few things are pure good or service… it is a continuum

Services Few things are pure good or service… it is a continuum Intangible Tangible TeachingMcDonalds Salt

Differences with service marketing: A.Generic 1.Intangibility experienced not possessed 2.Production method 3.Perishable(new term: de-marketing)

Differences with service marketing: A.Generic 1.Intangibility experienced not possessed 2.Production method 3.Perishable(new term: de-marketing) 4.Distribution channels 5.Promotion 6.Pricing How do you price a service? 7.Inseparability produced and consumed at same time 8.Client-based relationships

Differences with service marketing: A.Contextual differences 1.Narrow viewpoint 2.Historical lack of marketing application 3.Different organization structures 4.Historical lack of competitive data 5.Impact of regulation & deregulation 6.Nonprofit aspects

The Service Encounter: 1.Social elements Social class Doctor (surgeon) Airports Customer rage “America’s businesses would save billions if they find employees who would apologize.”

The Service Encounter: 2. Servicescapes The physical area in which the service takes place. Provides physical evidence of intangibles

The Service Encounter: 2. Servicescapes The physical area in which the service takes place. Provides physical evidence of intangibles This includes websites

The Service Encounter: 3. Service Quality Search qualities: attributes that can be examined before purchase

The Service Encounter: 3. Service Quality Search qualities: attributes that can be examined before purchase Experience qualities: experience before & after Credence qualities: One of the reasons people show diplomas, etc.

The Service Encounter: 4.Service Evaluation Hard to do… what does it mean? How do you know if you have any validity?

The Service Encounter: 5.Personnel a.Insure QSCV Q: Quality S: Service C: Cleanliness V: Value Disney was a pioneer….

The Service Encounter: 5.Personnel a.Insure QSCV b.Staff behavior, appearance, uniforms c.Proper people Interpersonal skills Behavioral flexibility Empathy d.Marketing plan modifications Recognitions and awards Incentive and rewards Sales and relationship training Orientation programs Communications

The Service Encounter: 6. Keys to Service a.Quality b.Reliability (consistency) c.Responsiveness d.Assurance (trust and confidence) e.Employee training and evaluation f.Management g.MANAGEMENT!

Branding Name, term, sign, symbol, or design or combination of the above that identify good or services of one seller or group of sellers and to differentiate them from those of competitors

Strong brands have brand equity

Brand equity gives, or is created by, 1.High brand awareness 2.Brand loyalty 3.Emotional connection 4.Price premiums 5.Product line extensions

A brand name should be: Short

A brand name should be: Short Easy to remember

A brand name should be: Short Easy to remember Create an image

A brand name should be: Short Easy to remember Create an image Be legal

A brand name could be: 1.Founder and/or Owner name 2.Functional name (DuraCell) 3.Invented names 4.Experiential names (Magellan) 5.Evocative names (Apple)

Brand Liability Brands can also go bad… 1.Customer dissatisfaction

Brand Liability Brands can also go bad… 1.Customer dissatisfaction 2.Product or Service Failures

Brand Liability Brands can also go bad… 1.Customer dissatisfaction 2.Product or Service Failures 3.Questionable Practices

Brand Liability Brands can also go bad… 1.Customer dissatisfaction 2.Product or Service Failures 3.Questionable Practices 4.Poor Record on Social Issues

Brand Liability Brands can also go bad… 1.Customer dissatisfaction 2.Product or Service Failures 3.Questionable Practices 4.Poor Record on Social Issues 5.Negative Associations

Market Share = Product position + Marketing effort Product Price Promotion Distribution

Product Positioning

“Who is our target market”

Product Positioning Product must be differentiated from others Why should anyone buy your product over your competitors? Two chances: You can differentiate by: Product Service

Product Positioning Product differentiation: Quality 1.Requirements Reliability (QC) Conformance (defects that should not occur) 2. Drivers Performance Durability 3. Enhancers Features Serviceability 4. Aesthetics Appearance Reputation

Product Positioning Product differentiation: Service 1.Requirements Service Reliability Service Assurance

Product Positioning Product differentiation: Service 1.Requirements Service Reliability Service Assurance 2. Drivers Performance Responsiveness 3. Enhancers Extended Services Customer Empathy 4. Aesthetics Appearance Reputation

There is a special case of differentiation: Price Low-Price Position Lower Transaction Costs One is good… The other is awful!!!

Products can be extended The core product is the umbrella band Extensions are called flanker brands Products extended in two ways Horizontal Vertical